Money does buy happiness

Does Money Buy Happiness? It Depends on How You Spend It

New research from a multinational psychology study at the University of British Columbia (UBC) suggests that money can buy happiness—but what you spend it on and where you live make a big difference.

Spending and Happiness Vary by Income Level

The study found that spending patterns in high-income and lower-income nations produce vastly different levels of happiness.

“Our research shows that spending on gifts and time-saving services, like house cleaning or takeout food, provided a greater happiness boost for those in wealthier nations,” said Dr. Säde Stenlund, first author of the study published in Communications Psychology. “On the other hand, paying off debt or housing costs brought less happiness in these countries.”

Regardless of location, happiness gained from spending was long-lasting, with participants reporting higher well-being months after making a purchase.

Largest Study on Spending and Happiness to Date

The study—funded by an anonymous donor couple and TED—is the largest global analysis of how spending affects happiness. Researchers tracked 200 participants across seven countries who each received a one-time $10,000 windfall. The participants logged 3,225 purchases, ranging from smartphones to housing, and rated how much happiness each purchase brought them. Six months later, researchers checked back to reassess their overall well-being.

The findings reveal fascinating cultural and economic differences in what brings people joy.

Certain Purchases Increase Happiness Everywhere

While cultural and economic realities shape how spending affects happiness, some purchases provide universal joy.

• Spending on donations and experiences boosted happiness across all countries.
• In high-income nations like Canada, the U.S., and the U.K., people derived more joy from gifts and time-saving services.
• In lower-income countries like Kenya and Indonesia, investing in basic needs and financial stability had the greatest impact on happiness.

“In countries where financial stress is a daily reality, paying off debt or securing housing naturally has a greater emotional impact,” said Dr. Stenlund, a postdoctoral researcher at Harvard’s T.H. Chan School of Public Health, who conducted the study at UBC under the guidance of psychology professor Dr. Elizabeth Dunn.

“But what’s remarkable,” she added, “is that certain purchases—such as donating, buying experiences, or investing in education and personal care—brought similar happiness benefits across the globe.”